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The U.S. Department of Labor filed a lawsuit
against a Bloomfield Hills, Mich., company and its 401(k) plan trustee for
failing to forward employee contributions to the plan.
Defendants are Mica Resources Limited, its
wholly-owned subsidiary Mica Metals, Inc. and president of both companies
William Zebedee. Zebedee also served as trustee to the 401(k) plan.
The plan had 19 participants and assets of
$651,070 as of Dec. 31, 1996. Mica Resources Limited is a holding company that
derived its income from Mica Metals, Inc., a recycling business with plants in
Bedford, Ind. and Bay City, Mich.
Mica Metals filed for Chapter 11 bankruptcy in
U.S. Bankruptcy Court in Indiana in July, 1998, and the Labor Department filed
a proof of claim in this bankruptcy proceeding on Dec. 2, 1998.
In its lawsuit, the department alleges that from
Jan. 1, 1995 to Dec. 31, 1995, the companies withheld from employees’ pay
their voluntary contributions to the plan but failed to remit the money to the
plan in a timely fashion. The lawsuit further alleges that from Jan. 1, 1996
through March 31, 1997, none of the withheld employee contributions were
forwarded to the plan.
The department is asking the court to order the
defendants to repay the plan with interest for any losses incurred as a result
of violating the Employee Retirement Income Security Act, and to remove Zebedee
from his position and permanently bar him from serving any employee benefit
plan covered by ERISA. In addition, the department is asking for the
appointment of an independent fiduciary to manage the plan.
The lawsuit resulted from an investigation
conducted by the Detroit District Office of the department’s Pension and
Welfare Benefits Administration into alleged violations of the federal pension
law. The lawsuit was filed in federal district court on August 13 in
Detroit.
(Herman v. Micah Metals, Inc .)
Civil Action No.
CV99-74006 |
